But first, step away from that shoebox!
Unless you actually ARE a small business accountant or the type of person who does filing for fun, chances are you find managing the paper-shuffling and administration of financial matters such as tax planning about as enticing as a dental procedure.
It has to be done, particularly when EOFY looms, but it just isn’t much fun.
The reality is both business and personal financial affairs can be extremely complex. The rules change frequently, your goal posts might keep shifting, and the stakes are extremely high.
No wonder so many clients have come to my office bearing shoeboxes of paperwork over the years!
Reactive management vs proactive planning
One of the issues for many people is their small business accountant is reactive, not proactive. For example, a reactive small business accountant simply takes down the details you give them and asks for extras that are the minimum required to meet the demands of the ATO or the bank or the business broker, and then presents you with the final number-crunched result.
It might do the deed in terms of ticking the right tax planning boxes, but does it get you enthused about where your business is headed? Does it help you plan for your own financial future in a constructive way?
To borrow a concept from decluttering guru Marie Kondo - does it bring you joy?
[It’s Ok if you laughed sarcastically a little just then - the idea of “accounting” and “joy” in the same thought might seem a little strange.]
What if your small business accounting was about more than just counting the beans and dividing them up?
What if your small business accountant could actually ask better questions, so there’s a bigger picture than just this year’s tax planning, this quarter’s BAS or the next financial year’s projections?
What if they could help you Kondo your financial and tax planning paperwork, so there’s less clutter involved, both physical and mental?
Strategic small business accounting
The urge to simplify is strong in many of us. This is why digital financial management software is so popular. Instead of a shoebox full of receipts, we can now have a thumb drive with scanned receipts that have been stored in the cloud.
That definitely saves a few trees, but it still won’t address the big questions most of us need to ask about how our affairs are tracking. And it definitely doesn’t help you think further ahead and map out a trajectory for the future.
Research last year by the Financial Planners Association of Australia found that a whopping 63 percent of Australians have either not mapped out a financial future or only have loose plans.
In a way this is understandable. It’s actually very hard to make good plans for tomorrow if you don’t have the clearest picture of where you are today.
As the old saying goes, what gets measured gets managed, which is where asking the right questions comes in. Some of the questions we ask our clients include:
- What are your financial objectives?
- What is your plan to achieve those objectives?
- Have you written down your plan?
- How clear is your plan?
- Do you know exactly what actions need to be taken to execute it?
After many years of working with small to medium sized business owners to answer these and other important questions about their financial affairs, I have come to believe that stepping away from the shoebox and making a better plan involves some basic fundamental steps that apply to just about anyone.
Most small business owners have some kind of goal in mind or they wouldn’t be in business, but there’s a big difference between a loose set of objectives and a coherent plan. The right accounting partner can help you develop a clear pathway for your business, with achievable milestones, effective systems and efficient processes.
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